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// DRILLS / ISSUE 01 / PACIFIC PREMIUM · SUCCESSOR
ISSUE 01 · 2026-09-05 · 5 MIN READ

The Numbers You Inherit

PACIFIC PREMIUM, FROM THE SUCCESSOR'S CHAIR

MANUFACTURING · THE SUCCESSOR'S CHAIR · DIFFICULTY 3/5

// THE SETUP

You are the second generation at Pacific Premium. Three years ago your father, who founded the company and still runs it, moved you onto the commercial side: the supermarket accounts, the food-service contracts, the pricing. The growth since then is partly yours. NZ$28m became NZ$42m, and the letter that arrived on Thursday says the bank has declined his request for NZ$1.5m more on the working capital line.

You have read the letter twice. It does not say the business is failing. It says the cash cycle has doubled: debtors that paid in 48 days pay in 82; stock is up 138% on sales up 50%; operating cash flow has turned negative. It offers a term loan for the permanent part and a smaller line for the rest. Your father read it once, called it an insult to six clean years, and has the other bank's relationship manager coming in on Tuesday to hear the growth story.

You know things the letter does not say. Two of the supermarket accounts you brought in pay at 90 days as policy. The stock build is three new lines, two of which are moving. Nobody at the company has an aged debtors report that is less than a quarter old.

Your father is bringing the growth story to another bank. The bank that said no named the cycle. What do you build before the next meeting?

// FY25 SNAPSHOT
SOURCE: THE BANK'S LETTER · FY25 MANAGEMENT ACCOUNTS · COMPOSITE CASE — FICTIONAL
REVENUE
NZ$42m
▲ +50% (2yr)
EBITDA MARGIN
9%
▼ -210 bps
OCF
-NZ$0.6m
▼ flipped negative
DSO
82 days
▲ +34 days
INVENTORY
NZ$3.8m
▲ +138%

NZ specialty food manufacturers typically run DSO 35–50 days. The gap between 48 and 82 is the file the next generation will be asked about first.

// YOUR JUDGMENT

What do you build before the next meeting?